Ten things a preeminent environmental economist thinks he knows about green stimulus

Alan Randall, world renowned environmental economist and the man in charge of my raises for the past eight years, had the honor of being named a Fellow of the Association of Environmental and Resource Economists at the Allied Social Sciences Association meetings yesterday in San Francisco (as a result stellar nomination packet by yours truly if I do say so myself--that's worth at least another 5%, right?). 

In his 'acceptance speech', Alan was given three minutes to espouse his wisdom on a topic of his choosing.  He chose to touch on green stimulus and the bogusity--I made that up--of the green jobs justification. 

Here is what he said, and what I think I agree with (another 2%?)...

Ten Things I Think I Know (by Alan Randall)

1. In ordinary times, good economic policy involves macroeconomic restraint and getting the prices right – including the prices for public goods and infrastructure.
2. These are not ordinary times, but there is a silver lining – recessions tend to be good for the environment.
3. In these extraordinary times, the ordinary rules of macroeconomics should be suspended – better to throw buckets of money at the problem now, and take care of the inevitable inflation when it shows up.
4. Stimulus packages tend to be not so good for the environment. Perhaps, then, the ordinary rules of environmental economics should be suspended, too – we can always clean-up the mess when the economy turns around.
5. But some kinds of environmental mess are not easily reversed – it may take a long time to recover from that kind of recovery.
6. A green stimulus package makes sense, so long as we understand green as a metaphor – bio-energy is literally green but is having a hard time shaking its metaphorical brownish tinge.
7. Suppose we know what we mean by green – we still need clarity about what we mean by stimulus. Surely not just jobs – arguments that begin with jobs are almost always disreputable: they tend to assume it doesn’t matter whether the jobs involve useful work.
8. Switching to more labor-intensive green energy sources may constitute a green jobs program. But a coherent green stimulus package should be about jump-starting the recovery by jump-starting the new century. That means tilting toward 21^st century green infrastructure.
9. Even if the times call for suspending the macroeconomic rules, the rules of micro and public economics should remain in place – it is hard to find a good argument for failing to get (and keep) the prices right. Environmental economists are notorious for being too environmental for most economists and too economic for most environmentalists.
10. I have just turned things up a notch – if you go along with me, we are now also too rigid about the microeconomics to suit the macroeconomists, and too flexible about the macroeconomics to suit the microeconomists.